AOL attemping to remain relevant

(via Ars Technica)

After suffering massive declines in subscription numbers, America Online has changed directions in an attempt to remain relevant. While still charging for dial-up access, the company has announced plans to offer the AOL service for free to broadband users. This effectively changes the company from a subscription based business to a primarily advertising supported business. So some details on how this will pan out:

AOL could give up as much as $2 billion in subscription revenue if a gambit aimed at boosting the Internet service’s advertising revenue goes ahead, the Journal said.

. . .

AOL expects that 8 million of its existing dial-up customers would cancel their subscription to take advantage of the new offer. Nearly one-third of the company’s customer base of 18.6 million in the first quarter already has high-speed access, it said.

AOL is losing subscribers to high-speed Internet providers at a quickening pace, losing about 850,000 in the first quarter, the Journal said. Total U.S. subscribers at the end of 2002 was 26.5 million, the newspaper said.

So there you have it. I’ve never used AOL, but honestly, if the service were free (as in beer) to me, I might at least check it out as, some of the offerings on the service sound potentially useful.

After losing $99 billion in 2002, and while continuing to bleed-out its subscriber base, I think someone at AOL realized that this might be the only way for the once mighty company to remain viable in a broadband based future.

[tags]AOL, America Online[/tags]